Aviation Finance content sponsored by Aero-Space Reports 

The Capetown Convention on International Interests in Mobile Equipment, in effect since 2006, was set up with the goal of keeping all movable assets on one international registry, and standardizing the registration of sales contracts, liens, leases, and legal remedies for default on loans—as well as repossession. The cost of registration ranges from $1,000 to $1,500. Both sellers and buyers must have their airplanes on the international registry.

Registration isn’t required for airplanes already financed, or owned free and clear. But sell that airplane, or buy another with more than 550 shaft horsepower or eight or more seats, and the terms of the registry kick in. For any airplanes that have these power ratings or seating capacities, both buyer and seller must obtain international registration if the buyer is seeking a loan. Owners wanting to refinance an airplane with those characteristics also have to have their airplanes registered.

It can be tricky. Let’s say the owner of a Piper M500 (formerly named the Meridian) wants to sell that airplane and buy a new Piper M600. Because the M500 has 500 shaft horsepower and six seats, it doesn’t need to go on the registry. But the 600-shaft- horsepower, six-seat M600 must be registered because its power rating is greater than 550 shaft horsepower.

Typically, the escrow company coordinating the closing of the sale will handle the registration. And by the way, if you’re thinking of going beyond an airplane transaction, and have a mind to buy or sell a railroad train or satellite—well, international registry requirements apply to those transactions as well.

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